Since the beginning, M-Shwari has been ‘savings-led’. Customers were encouraged to deposit money into M-Shwari in order to qualify for loans. The more you deposit into your account, the more you can borrow. This strategy failed to produce a revolution in inclusion desired since customers were not maintaining a balance in their M-Shwari account.
M-Shwari has now shifted to a credit-led savings strategy, whereby depositors are attracted to maintain funds in M-Shwari with a reciprocating borrowing proposition from M-Shwari.
With this strategy M-Shwari can offer loans to borrowers at account opening.
M-Shwari is trying to go beyond giving loans by incorporating methods of incentivizing savings in M-Shwari account and support discipline of saving. This will in turn enable clients to access larger amounts in the future while turning M-Shwari users into net savers over time.
M-Shwari is currently operating where demand in the low income market is. This service makes it possible for ordinary Kenyans to save, earn interest and borrow money using their mobile phones and the M-PESA service.
M-Shwari allows M-PESA customers to save as little as KSh 1 (0.01 $US) and to earn interest on their savings, together with access to micro-loans from as little as KSh 100 (1.16 $US). The loan can be accessed anytime and the funds are transferred into the customer’s M-PESA account immediately. There are no charges for transfers between M-Shwari savings accounts and M-PESA accounts.